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Food Prices Outpace Inflation, CPI

In response to the recent increases in price at Anna's, Boca Grande, and others, John Pepper of Boloco emailed to give me the scoop. So cast out theories of greed, tortilla shortages, or tariffs. The culprit is food cost.

First, a little background.

The buying power of the dollar measured by the Consumer Price Index, which reports no unusual movement. Inflation has been moving month to month between around 2% and 4% over the past year - also within a normal range. During that time, the cost of food has skyrocketed according to the Bureau of Labor Statistics.

So what's behind the climbing cost of food? Climbing cost of seeds? Water? Fertilizer? Labor? Well, it's not that simple, and I'm a casual student of economics at best.

It's partly because of corn prices, driven up by congressional mandates for ethanol production, which have reduced the amount of corn available for animal feed. It's also because of tougher immigration enforcement and a late spring freeze, which have made farm laborers scarcer and damaged fruit and vegetable crops, respectively. And it's because of higher diesel fuel costs to run tractors and attractive foreign markets that take U.S. production.

Source.

Seems like this problem won't reverse itself anytime soon. Time to pick up a second job to satisfy your burrito cravings.

This entry is filed in {News}.

Wednesday, August 22, 2007 by Jonah.